One point that isn't addressed is the difficulty of actually working with large numbers of unmergeable binary files, even assuming you've got the disk space to

One point that isn't addressed is the difficulty of actually working with large numbers of unmergeable binary files, even assuming you've got the disk space to store them. Unless you've got some kind of centralized lock/unlock (check in/check out, etc.) functionality, serializing access to files is going to prove difficult. I've seen it suggested that you should have some better means of coordination than what's in effect a per-file mutex. It's true you need to have a rough idea at a higher level what's going on (no point deciding ten people will all work on the same thing, when that means they'll all have to edit the same file!), but day to day, working at the file level, you still need the mutex to ensure people don't step on one another's work. It's a simple mechanism, and it scales about as well this sort of thing can.